Convenience stores flood the UK retail sector

Gema Boiza. Periodista. @GemaBoiza

Large retail store formats are a thing of the past in the UK. Retailers seem to have come to the realization that the bid for new consumers and efforts to retain loyal customers requires an offer with lower prices and a varied selection in close proximity to their homes and workplaces.

This situation has provided ideal conditions to drive the surge in convenience stores in recent years. In Spain, this format is associated with the kinds of stores inside gas stations, but in the English-speaking world, they go far beyond that concept. These stores can also be found in train stations and airports, and are in street-level locales in the center of all cities across the UK.

Retail giants, such as Tesco and Asda; big discounters, such as Aldi and Lidl; and even Sainsbury's, Morrison's and Marks & Spencer are focusing on smaller sales formats which are easier to open in residential neighborhoods, bustling city centers and business districts.

These are some of the conclusions detailed in the USDA Foreign Agricultural Service report, UK Supermarket Chain Profiles 2013, to which Wiki Spanish Food has access. The study also reveals that Tesco, the leading retailer in the UK, has already opened 1,500 convenience stores using its Express store format.

Its one-stop shops are another popular format being rolled out, which are even more similar to the typical corner grocery, open seven days a week from early in the morning until late at night.

Tesco, which was the first retailer to offer loyalty cards and configure its website to allow customers to shop online, is now also committed to stocking the shelves of its Express stores with plenty of fresh products, baked goods, wines and other alcoholic beverages.

Segmented offer, according to format

In addition to supermarkets and convenience stores, Tesco has also been engaging in a trend that is setting the pace in the UK retail sector, by slowly segmenting its product offer according to its various sales formats. Its Metro stores offer customers food to go, and its Superstores sell food as well as non-food products, such as electronics and books. Tesco offers an even wider selection at its Extra stores, where it also sells clothing and beauty products.

In response to the positive reception by consumers to its non-food formats, Tesco has implemented a new network of stores to sell home goods called Home Plus.

Its biggest rival has executed the same strategies. Asda, which is second-largest retailer in the UK and was acquired by Wal-Mart in 1999, has also given in to consumer demands. Although it staunchly defended its large retail format business, in 2010 it decided to focus on convenience stores. To implement this strategy, the 180 locales it acquired from Netto Stores were transformed into corner shops.

Asda currently has five different sales formats: Supermarkets, Superstores, Supercentres, Asda Living and Asda Local stores. While the first two sell all kinds of products, and food in particular, the third stocks food and non-food items, the fourth focuses mainly on clothing, and the fifth is the convenience store format.

Just as the company has segmented its formats, it has done the same with its brands. And like most brands in and outside of the UK, Asda (which does not have a loyalty card) has focused on increasing its portfolio of private label products.

Sainsbury's has done the same, and it too has included convenience stores in its extensive store network.

According to the above-mentioned USDA report, this brand has 583 supermarkets and 523 convenience stores, which mainly sell sandwiches and pre-prepared foods.